Republican claims drilling bill vote prompted oil price tumble

A House Republican said Friday that Thursday’s sharp drop in oil prices, to below $100 per barrel, stemmed from House passage of legislation to speed up Gulf of Mexico oil-and-gas leasing and require leasing off Virginia’s coast.

Rep. Michael Burgess (R-Texas) claimed during Friday’s Joint Economic Committee hearing that the bill sent a message to the oil market about future supply.

“What happened yesterday? Oh, the House passed a bill,” Burgess said.

“Here we are in the Senate today, and I would just mention to the Senate that our bill yesterday to expedite lease sales in the Gulf of Mexico, those very leases that have been delayed or canceled by the administration in the past year, The fact that we're willing to expedite those lease sales had a profound effect on those people who like to speculate and hedge in the oil market,” he said.

“They saw that the Republican House was serious about addressing the issue of the supply of our oil produced within our shores,” Burgess said. (His comments are about 38 minutes into the hearing video.)

The bill faces highly uncertain prospects in the Senate and White House opposition.

The Texas lawmaker’s comment reflects an increasingly common GOP argument that expanding offshore development will quickly help reduce oil and gasoline prices, even though leasing is just the first step for often complex projects that generally would not bring new supplies online for years.

The federal Energy Information Administration has estimated that even a major expansion of domestic offshore development would have very little impact on world oil prices or U.S. gasoline prices.